ABSTRACT: Elhauge (2009) provides a wide-ranging article that is impressive both
in its clarity and its holistic attack on the practice of bundling and
tying. In this commentary, I will focus my attention on one aspect of
his presentation, namely the effect of price discrimination via
metering and tying on consumer welfare and total welfare.

Elhauge
makes the claim that we should not suppose that the total welfare
effects of price discrimination are positive. Even if they are, he
suggests that this perspective is too narrow; a price-discriminating
monopolist will make more money and so may incur greater ex ante costs
to secure its market position. And if total welfare still rises after
taking these costs into account, Elhauge makes the further argument
that antitrust is and should be focused on consumer welfare, not total
welfare. In that domain, the presumption should be that price
discrimination lowers consumer welfare.